he Covid-19 health crisis underlined the impact of an external shock on the supply systems of retailing and manufacturing companies, as we reported in a 2022 article. For example, recurring stockouts and a sharp increase in delivery times have led to deteriorating customer service levels. Not surprisingly, the Ukrainian crisis is in turn highlighting dysfunctional supply of raw materials, components, and commodities, as Ebru Orhan’ analysis points out. Europe is now obliged to find alternative sources to those historically coming from Russia (including the famous gas), but also from Ukraine. The presence of global value chains amplifies the problems, with shortages spreading much more quickly over entire continents like a tsunami. In their article published in March 2022, David Simchi-Levi and Pierre Haren cite the case of neon gas, used massively in the manufacture of semiconductor chips. Ukraine supplies about 50% of the world's neon gas, which highlights the magnitude of future shortages in the event of a multi-year conflict. The effects of other shortages have also been felt since the spring of 2022. For example, Volkswagen and BMW have been forced to reduce their production levels due to a shortage of electrical harnesses, as Ukrainian suppliers have stopped making and therefore delivering them. This has resulted in queues of several months to get access to a new vehicle, a situation that was almost
THE RISE AND FALL OF SUPPLY SYSTEMS: from global to regional?
Feb 01, 2023
8 minutes
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